Safehold (SAFE) - 2025 Q4 - Annual Results

Financial Performance - Q4'25 revenues increased by 7% year-over-year to $97.9 million, while FY'25 revenues rose by 5% to $385.6 million[10] - GAAP net income for Q4'25 was $27.9 million, an increase of 7% year-over-year, and FY'25 net income was $114.5 million, up 8% from FY'24[10] - Net income attributable to Safehold Inc. common shareholders for the year ended December 31, 2025, was $114,469, an increase of 8.1% compared to $105,763 in 2024[33] - EPS excluding non-recurring gains/losses for the year ended December 31, 2025, was $1.65, compared to $1.57 in 2024, an increase of 5.1%[33] Portfolio and Asset Management - The company reported a total portfolio gross book value of $7.1 billion, with a loan-to-value ratio (GLTV) of 34%[5] - The portfolio includes 164 assets across the top 30 MSAs in the U.S., with a rent coverage ratio of 3.4x[18] - Ground lease originations in Q4'25 totaled $112 million, with FY'25 originations reaching $277 million[4] - New leasehold loan originations in FY'25 amounted to $152 million, with a total of 4 loans originated[4] - Ground Lease receivables increased to $2,003,931 in 2025 from $1,833,398 in 2024, representing a growth of 9.3%[28] Financial Position and Liquidity - The company has a total debt of $4.9 billion, with a debt-to-equity ratio of 2.01x and an effective interest rate of 4.3%[22] - The company has $1.24 billion in cash and credit facility availability, enhancing liquidity and flexibility[22] - Total liabilities increased to $4,809,396 in 2025, up from $4,525,352 in 2024, indicating a rise of approximately 6.3%[28] - The equity attributable to Safehold Inc. shareholders increased to $2,408,311 in 2025, up from $2,344,018 in 2024, reflecting a growth of 2.7%[28] Ratings and Outlook - Safehold received an S&P ratings upgrade to A-, with stable outlooks from Moody's and Fitch[3][24] Commitments and Future Projections - Safehold's Core Ground Lease Portfolio includes $142 million in forward commitments that have not yet been funded as of December 31, 2025[48] - The company reported $68 million and $138 million in forward commitments for new ground lease originations in Q4 2025 and FY 2026, respectively[48] - The company has a target commitment of $275 million for its original investments, with a remaining capital of $400 million from its joint venture partner[48] - The Economic Yield is projected using cash flows beginning in 2026, incorporating fixed escalators and inflation scenarios, with a long-term CPI target of 2.0%[48] Valuation and Appraisal - The company tracks Unrealized Capital Appreciation (UCA) as the difference between the Combined Property Value (CPV) and the Aggregate Cost Basis, indicating the potential value increase of its ground leases[48] - Safehold's portfolio includes a significant portion (81%) with CPI lookbacks, ensuring rent increases based on cumulative CPI growth[48] - The company emphasizes the importance of independent appraisals for determining the Combined Property Value (CPV) of its ground leases, which are reviewed at least every 12 months[48]